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Scalia's Cleaning Service is investigating the purchase of an ultrasound machine for cleaning window blinds. The machine would cost $136,700, including invoice cost, freight, and training of employees to operate it. Scalia's has estimated that the new machine would increase the company's cash flows, net of expenses, by $25,000 per year. The machine would have a 14-year useful life with no expected salvage value. (Ignore income taxes.)Determine the appropriate discount factor(s) using table.

Required:
1. Compute the machine's internal rate of return. (Round discount factor(s) to 3 decimal places and final answer to the closest interest rate. Omit the "%" sign in your response.)
Internal rate of return % ?

2. Compute the machine's net present value. Use a discount rate of 16%.
Net present value $ ?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9976025

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